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Aramco Signs $6 Billion Procurement Agreements

The agreements aim to strengthen Aramco's domestic supply chain ecosystem to meet customers' demands and provide suppliers with long-term visibility of expected future demand. (SPA)
The agreements aim to strengthen Aramco's domestic supply chain ecosystem to meet customers' demands and provide suppliers with long-term visibility of expected future demand. (SPA)
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Aramco Signs $6 Billion Procurement Agreements

The agreements aim to strengthen Aramco's domestic supply chain ecosystem to meet customers' demands and provide suppliers with long-term visibility of expected future demand. (SPA)
The agreements aim to strengthen Aramco's domestic supply chain ecosystem to meet customers' demands and provide suppliers with long-term visibility of expected future demand. (SPA)

Aramco, one of the world's leading integrated energy and chemicals companies, signed on Tuesday 40 corporate procurement agreements worth $6 billion with suppliers in Saudi Arabia.

The agreements aim to strengthen Aramco's domestic supply chain ecosystem to meet customers' demands and provide suppliers with long-term visibility of expected future demand.

They will contribute to achieving the objectives of Aramco's In-Kingdom Total Value Add (iktva) program, the company's pioneer initiative that aims to drive the growth of a vibrant economy and create new opportunities for Saudi people.

Aramco Executive Vice President of Technical Services Wail Al-Jaafari said: “The 40 new agreements signed today are expected to contribute to the domestic value chain and further enhance the ecosystem that Aramco is assisting to build.”

“These agreements move us towards a more prosperous, diverse, and resilient supply chain, which will help ensure business continuity. They also represent a key milestone on our iktva journey and provide our partners with an opportunity to benefit from a robust and diversified business environment,” he stated.

Additionally, Aramco signed two MoUs with strategic partners to collaborate on localization and supply chain development.

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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
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Saudi Non-Oil Exports Hit Two-Year High

The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)
The King Abdulaziz Port in Dammam, eastern Saudi Arabia. (“Mawani” port authority)

Saudi Arabia’s non-oil exports soared to a two-year high in May, reaching SAR 28.89 billion (USD 7.70 billion), marking an 8.2% year-on-year increase compared to May 2023.

On a monthly basis, non-oil exports surged by 26.93% from April.

This growth contributed to Saudi Arabia’s trade surplus, which recorded a year-on-year increase of 12.8%, reaching SAR 34.5 billion (USD 9.1 billion) in May, following 18 months of decline.

The enhancement of the non-oil private sector remains a key focus for Saudi Arabia as it continues its efforts to diversify its economy and reduce reliance on oil revenues.

In 2023, non-oil activities in Saudi Arabia contributed 50% to the country’s real GDP, the highest level ever recorded, according to the Ministry of Economy and Planning’s analysis of data from the General Authority for Statistics.

Saudi Finance Minister Mohammed Al-Jadaan emphasized at the “Future Investment Initiative” in October that the Kingdom is now prioritizing the development of the non-oil sector over GDP figures, in line with its Vision 2030 economic diversification plan.

A report by Moody’s highlighted Saudi Arabia’s extensive efforts to transform its economic structure, reduce dependency on oil, and boost non-oil sectors such as industry, tourism, and real estate.

The Saudi General Authority for Statistics’ monthly report on international trade noted a 5.8% growth in merchandise exports in May compared to the same period last year, driven by a 4.9% increase in oil exports, which totaled SAR 75.9 billion in May 2024.

The change reflects movements in global oil prices, while production levels remained steady at under 9 million barrels per day since the OPEC+ alliance began a voluntary reduction in crude supply to maintain prices. Production is set to gradually increase starting in early October.

On a monthly basis, merchandise exports rose by 3.3% from April to May, supported by a 26.9% increase in non-oil exports. This rise was bolstered by a surge in re-exports, which reached SAR 10.2 billion, the highest level for this category since 2017.

The share of oil exports in total exports declined to 72.4% in May from 73% in the same month last year.

Moreover, the value of re-exported goods increased by 33.9% during the same period.